I thought I'd give everyone a heads-up on our online store (http://landscapelighting.cast-lighting.com/home/index/10367.0.1.1) that launched this morning.

Why we launched the store.

For years we resisted online sales because of the following reasons:

We didn't want to undermine our work with distributors.
We didn't want to compete with contractors.
We didn't want homeowners doing poor installations.

We finally decided that an online store was needed because:

Although we have hundreds of distributors, there are large regions that are not served.
There are many determined DIY'ers who will not hire a contractor and want an easy way to get our products.
Many homeowners are frustrated by having no convenient place to purchase replacement lamps.
Some of our distributors have their own online stores, so it's no secret what our products cost to the homeowner.

Our online solution addresses most of the objections contractors and distributors might have.

All online orders go to an order exhange that makes these orders available to all our distributors. Distributors in the near vicinity automatically get the order if they have the product in stock.
Visitors to the store are strongly encouraged to hire a professional to design and install their projects. They are given this message on every page, and reminded again just before they check out. We expect many will browse the store and decide not to buy, instead they'll look for a designer.
Prices are set at our MAP (minimimum advertised price) which is 20% below retail. We are also enforcing the MAP on everyone who sells our products online.
Contractors who live in regions unserved by our distributors may qualify for preferred pricing through the store. Contact Bruce if you're in this category (mailto:brucek@cast-lighting.com).

Since our products are not cheap, we don't expect a lot of online sales (except maybe for lamps). We do expect, however, that the existance of the store will increase our online visibility and lead to more referrals to CAST-trained designers.

Your comments and feedback are welcome.

RLI Electric

04-03-2012, 12:02 AM

Steve, how is the shipping going to be handled for the homeowners? I am not surprised that this is happening. This is the reality of this or any other industry. Naturally, I am not tickled about this but I do understand the companies reasoning. Kudos to you for announcing it instead of having someone tear into you first.

Hi Steve. I have always shied away from using any product that is sold direct to customers at anything less than full MSRP pricing. By listing your discounted prices online, you simply strip away any lattitude the contractor has to sell the product for a price that they determine is fair.

It is not uncommon for lighting pros to sell the components they use to their clients at full MSRP. Now, you have effectively lowered the price they can charge by 20%.

I would expect that the amount of retail sales you gain will be dramatically offset by the amount of contractor sales you lose due to your online pricing policy.

Just my $.02 (or is that now $0.016?)

RLI Electric

04-03-2012, 07:06 AM

I agree with James. I rarely try to promote the product that I use. I will tell the client I use what is necessary to get the job done and one of the reasons I am a good choice is because I am familiar with so many of the products that help that end result. This is one more reason that I will not ever promote companies products over the results that I can deliver. It does not matter if it is Cast or any other manufacturer. Free door hangers, magnets, cut sheets for my proposals, flashlights or any other marketing material the manufacturer supplies to "help" my marketing, it is not going to happen for me. I have to market my business because one day they will be selling directly against me and even worse as some other manufacturers that I have heard of, offering demo's or installs.
Again, this is not a hit against Cast. I think they have some great stuff and I have said before that the wash light fixture is one of the best things that has ever come out in my opinion. However, as the manufacturers have to adjust to the changing business client they will have to expect the installers to do the same.
A savvy dude once said, "sell systems, not stuff"

starry night

04-03-2012, 10:45 AM

Why would you have ANY retail discount and then (apparently) have a trade discount available to contractors? Or what is the purpose of the " Contractors, Distributors, and Specifiers, Click Here." ?

steveparrott

04-03-2012, 11:27 AM

Why would you have ANY retail discount and then (apparently) have a trade discount available to contractors? Or what is the purpose of the " Contractors, Distributors, and Specifiers, Click Here." ?

The best way for a mfg. to control online discounting (that undermines distributors and contractors) is to establish a MAP (minimum advertised price). Kichler spearheaded this effort and defended it in court. The MAP is never MSRP - there must be some discount - 20% is a conservative one. We post the discount because we want to capture the sales that will be fulfilled by our local distributors.

As I mentioned before, the trades link is to provide product access to contractors not currently served by our distributors.

steveparrott

04-03-2012, 11:54 AM

Steve, how is the shipping going to be handled for the homeowners? I am not surprised that this is happening. This is the reality of this or any other industry. Naturally, I am not tickled about this but I do understand the companies reasoning. Kudos to you for announcing it instead of having someone tear into you first.

The customer pays for shipping through their shopping cart, although they can pick up the product locally (if it's available) and avoid shipping charges.

We knew there would be some objections to the store, but, as you say, the industry is changing (as are consumers). We hope that our loyal designers appreciate that (compared to some other lighting companies) our way of doing business is still centered around our support for professionals.

Classic Lighting

04-03-2012, 05:33 PM

I have mixed feelings about this store. It's good for Cast and the distributor because they are moving more product. It's bad for the contractor because now the end user can cut the contractor out of the chain.

Part of the reason I have been loyal to Cast is because I knew that consumers had to contact me to get these products. I frequently get referrals from my distributor for a consumer who asks for Cast. Now that advantage is gone.

I realize that Cast is looking to increase sales. However, it's coming at the expense of the contractor. So much for a business relationship:confused:.

steveparrott

04-03-2012, 05:48 PM

I have mixed feelings about this store. It's good for Cast and the distributor because they are moving more product. It's bad for the contractor because now the end user can cut the contractor out of the chain.

Part of the reason I have been loyal to Cast is because I knew that consumers had to contact me to get these products. I frequently get referrals from my distributor for a consumer who asks for Cast. Now that advantage is gone.

I realize that Cast is looking to increase sales. However, it's coming at the expense of the contractor. So much for a business relationship:confused:.

I understand the concern, but consumers have always been able to buy CAST direct from the distributor - just like they can buy anyone's products. Rest assured, the referrals will still come - only a tiny percentage of DIY'ers are willing to invest the money, time and energy to install a profssional-quality system. And those DIY'ers would never hire a contractor anyway.

RLI Electric

04-03-2012, 06:03 PM

Most of my clients are computer savvy. They ask me for a referral for regular interior lighting and I send them to one of my local lighting stores. They meet with my lighting store guy and then go home and go to the online stores and shop for the lights. He gives them all his expertise and they stick it in his back.
That is why it is tough to be a brick and mortar store and the world has changed.
Now, my client my not "want to go through the trouble" of installing it themselves but they sure will try to use the pricing against me when negotiating a project. Rest assured it will be used against us.
This is the new way of business, I understand and appreciate that but we as designers and installers will evolve with the new world too. I am not exactly sure how yet, but it will start with not promoting a particular name brand fixture. That does not mean only CAST so please don't take offense. I will promote my skills and talents that I have spent thousands of hours and thousands of dollars to achieve. I will market my company as a design/ build company and the fixtures of manufacturers are just that, tools. Always has been and always will be.
The names of the fixtures I use will have as much relevance as the names of the paper clips in my desk drawer. It is a commodity and whoever has the best pricing for keeping the elements off of my lamps (the real working thing in all of this) wins. I test the heck out of lamps, fixtures, connectors and everything else related to this industry. Those that I don't test, I call on my AOLP buddies to help out with answers and we come up with a proven winner. Sometimes its CAST, sometimes it's FX sometimes it's Vison 3 and on and on and on.
Just my two cents.

Classic Lighting

04-03-2012, 06:04 PM

I understand the concern, but consumers have always been able to buy CAST direct from the distributor - just like they can buy anyone's products.

Your right. My Cast distributor is a wholesale to-the-trade plant nursery and homeowners know not to even walk into the business. I assumed that all Cast distributors were to-the-trade only but it's a regional issue.

bcg

04-03-2012, 07:57 PM

Like everyone else, I would prefer that Cast, like RainBird, sell at MSRP on their company store instead of MAP. In most distribution, MAP is meant to be something the distributor is bound by, not something that the manufacturer is going to sell for in their own online store. By selling directly from the manufacturer at MAP, you've effectively turned MAP into MSRP.

That said, I do not break out my parts and labor in my bids so it's tough for a customer to know what I'm charging for the materials and I won't break it out if they ask me to. I'm selling a lighting system, what the materials cost is in that is irrelevant, either they see the value of the project and can afford it or they don't/can't.

PS - My distributor sells at full MSRP to non-contractors. I wonder how they feel about now having to sell Cast at 20% less than they would have to a non-contractor if the order comes from the Cast online store...

indylights

04-03-2012, 10:49 PM

I don't have any problems with manufacturers selling online at full retail, it's how things are done now. But I don't see any justification for giving a 20% off discount to online purchasers while people who walk into stores get jabbed with full retail if they aren't contractors.

Second, for the contractors who think their customers can't buy at their cost or know what your cost is, you are dreaming. I have called all of the national distributors, both fixture and lamp, several of whom sponsor this board, and several local ones(if you want me to name names I will) and not one, I repeat, not one hesitated to give me contractor pricing just by me telling them I was a contractor.

And what about all you guys who say sell yourself, sell you skills, you never break out fixture costs or promote brands, you sell systems and not fixtures, be remarkable? Why do you care if any fixture is advertised on line if that is what your business model is? You're not selling a fixture, remember?

And finally, why do you buy from and keep in business internet based distributors who sell to anyone and everyone at the same price? Don't be hypocritical guys. If you're going to bash one, bash them all.

Scott Maloney
Sunflower Landscapes

RLI Electric

04-03-2012, 11:18 PM

Scott, you're absolutely right. However sometimes I get tricked and in a knee jerk reaction I will mention a price. It happened yesterday during the day. The potential client said,"How much is a fixture?" I said roughly "X amount of dollars" reciting the list price that I just happened to know off the top of my head.
I then got home and saw this post and thought, "Hmmm, it may appear to my potential client that I am trying to make a 20% markup if they knew where they can shop online."

LLC RI

04-03-2012, 11:20 PM

Hi Guys,
I've read the posts on this thread and have a few thoughts to share;
1. In this day and age the consumer/ some consumers, take to the internet to 'check' pricing that they get from their various quotes. An example of this is when I quoted a job and was bidding against a franchise installation company with three initials. The client told me that the competitor was charging him 1 dollar PER WATT for the transformers, and he found the transformers cheaper online.

2. Having said that, I think by offering the 20 % off to the average consumer is a mistake. If I did a job quote with some CAST lighting on it, and it happens to be that kind of consumer who will take to the internet to check out my information, they will likely mention that they can buy the lights online and save 20 %. This will undoubtedly lead to some issue and a reduction in our pricing to 'compete' with Casts online price.

Might I suggest that CAST does their online store and instead of even having a cart, but they try to 'steer' the internet customer to a designer/installer in their area.

This would be a win win win... the contractor gets a job, the distributor gets business from the contractor, and cast gets business from the distributor. The client is the big winner because they got a top quality job, designed and guaranteed by a qualified contractor.

4. I do agree with STeve's last comment about few DIY'ers willing to pay that kind of money to put in their own system... however, I think it's a safer play to have retail prices online and then if that particular internet shopper decides they want to buy direct, then the order goes to a distributor and based on volume, for example, that individual distributor could take a percentage off at their own discretion.

George
Lighting Quality Homes for Nearly A Quarter Century

Lite4

04-04-2012, 08:28 AM

Sell the sizzle, who cares the brand of steak. I can't remember the last time a potential client asked me what brand of fixture I use. They simply tell me I want it to look like those pictures of the other jobs you have done. If someone wants to buy CAST or any other online product on the cheap, big deal, let em. Mark up your installation pricing accordingly to offset the loss and oh, coincidently " Mr Customer, feel free to purchase all the equipment you want online. I will even tell you what you need to buy. However, since you are purchasing it, you are directly responsible for any warranty issues that may arise. So if something gets broken, a bulbs burns out or if something is faulty in the product, you will need to take care of that or I can do it for a service fee.
I don't seed this as a huge issue. Everything is online now, and showing a 20% break, well be prepared to adjust your install costs accordingly to compensate if need be. .02

indylights

04-04-2012, 09:36 AM

Tim,

The great state of Indiana must finally be getting into your blood. You always get the bigger picture more than most. Hopefully this ridiculous weather we've been having is keeping you busy.

Scott Maloney
Sunflower Landscapes

INTEGRA Bespoke Lighting

04-04-2012, 09:53 AM

A long time ago i was told a parable that goes something like this:

When you make a decision that you think is right, and most everyone else tells you you are wrong, you are most certainly wrong.

If you read back through this thread so far you will find an example of this. It has to do with the decision to post discounted prices. The better solution is to only post MSRP prices. That will keep your current customers happy and open your business up to accepting the retail / diyer business that you want to capture.

So many great posts on this thread. I hope CAST and Steve are hearing and not just listening.

Lite4

04-04-2012, 10:31 AM

Tim,

The great state of Indiana must finally be getting into your blood. You always get the bigger picture more than most. Hopefully this ridiculous weather we've been having is keeping you busy.

Scott Maloney
Sunflower Landscapes

Hey Scott,

Yes, its nice to be in a state of Right thinkers. We have been swamped with this early spring. How has biz been for you so far? Good to see a fellow Hoosier on the forum.

steveparrott

04-04-2012, 11:02 AM

Great feedback, thanks guys. It seems the main objection is the display of the 20% off discount. I'll try to explain our thinking.

First, we had to establish a MAP (minimum advertised price) because some of our distributors have online stores and many of them were discounting the prices. People often search for 'cast lighting prices' and they end up on these stores.

Second, the appropriate MAP could not be MSRP because our MSRP is very high compared to other lighting brands. Make the comparison yourself, check (for other brands) what you pay compared to the retail price - don't look at it purely as a percentage, but also consider dollars in your pocket. (One brand has MSRP set at 5% above contractor cost!) You'll find a lot more profit in CAST (even at MSRP minus 20%) than the others.

Third, we post the MAP discount on our site (and describe our MAP policy on the home page of the site) for a few reasons.

We want visitors to our store to come to the conclusion that they've found the best place to purchase CAST - a place where they can get the best discount. If we only posted MSRP, they would continue searching till they found a discounted store or another brand - you'd get zero referrals in that case.
We want to capture CAST customers on our store vs. others because the orders go to our local distributors - this honors our committment to our distributors. (Give us some credit for not just taking the orders direct; building and maintaining our store is expensive, and the profits go to our distributors.)
By capturing as many CAST customers as possible, we have the opportunity to persuade them to hire a professional. These leads that come from the store end up as referrals.
.

indylights

04-04-2012, 11:02 AM

James,

There has been a total of 6 different people make comments that could be viewed as negative in this thread. That hardly constitutes "everyone". And by the way, many fixtures (and lamps) I have read you say you use are readily available online at prices less than full retail.

Scott Maloney
Sunflower Landscapes

steveparrott

04-04-2012, 11:19 AM

Your right. My Cast distributor is a wholesale to-the-trade plant nursery and homeowners know not to even walk into the business. I assumed that all Cast distributors were to-the-trade only but it's a regional issue.

This is another reason we launched the store. Unfortunately, only a small percentage of installed jobs are serviced by you guys. Over the years, I've fielded dozens of complaints from homeowners that have been served poorly (or not at all) by distributors-to-the-trade. One homeowner drove 30 miles to a distributor to buy lamps, only to be turned away at the door because homeowners were not welcome there. Another was furious after numerous attempts to purchase lamps locally, he said, "Obviously your system doesn't work!"

Many homeowners, frustrated at attempts to get CAST lamps, end up with box store brands and call us (or you) to complain about frequent lamp burnout.

Now, our current system solves that problem, and even the most homeowner-unfriendly distributors are able to serve these homeowners.

steveparrott

04-04-2012, 12:37 PM

Just to clarify my last post.

The great majority of our distributors do an excellent job serving all kinds of customers. We choose our distributors with this in mind.

There's only a small number who fail to serve homeowners.

starry night

04-04-2012, 01:16 PM

We ought to give Cast the benefit of the doubt. We laud them for their product development and we all appreciate Steve's contributions to the industry and to this forum. So we ought to assume that they did not make this decision without in-depth consideration of all the issues.

irrig8r

04-04-2012, 02:43 PM

We ought to give Cast the benefit of the doubt. We laud them for their product development and we all appreciate Steve's contributions to the industry and to this forum. So we ought to assume that they did not make this decision without in-depth consideration of all the issues.

I agree with that.

I deal with a single location distributor for a lot of my lighting needs... I get both irrigation and lighting supplies from him, and my discount is based on the volume I do.

A couple of years ago I discovered that homeowners who spent over $1,000 with him were getting a significant discount off MSRP that amounts to them paying about only 10% more than I am.

It bothered me at first, but when I factored in all the referral work I get from him, mostly people who don't want to do it themselves (once they discover all that's involved), and the convenience of the location, then I realized I could live with it.

If I have customers who are looking for just a few parts, like for their drip irrigation, I refer them to him.

I've never had a customer say I was charging too much for the products I install.

And after OK experiences with a couple of customers who purchased lighting fixtures themselves online (that I installed for them) I discovered I can break out the design/ planning and installation from the sale of the product, so that if they want to feel like they're getting a deal, they can.

Of course, any product warranty issues are theirs to handle (or I can handle those too for additional fees.)

S&MLL

04-04-2012, 02:47 PM

How many of these local distributers are aquarius stores?

What does msrp stand for? You are the manufacturer you suggest the retail price but then sell at 20 off???

Idk about this one cast
Posted via Mobile Device

S&MLL

04-04-2012, 02:49 PM

There is a sign where i buy lighting..... it says attention homeowners our contractors come first. And that means alot to me
Posted via Mobile Device

RLI Electric

04-04-2012, 05:03 PM

It has been my experience that most distributors will only sell to the professional. Except my electrical supply house of course.
Would it have made more sense if the distributor was like my plumbers supply house? "Tell them Joe the plumber sent you and they will get you what you need." It works for my plumbers and my HVAC guys supply houses. My electrical supply house is open to anyone. I can be sitting there with a whole building worth of material to purchase but Johnny Homeowner needs a lamp for his microwave and the world stops for that $1.39 appliance lamp.
I have to disagree with this one Steve. I think a better thing would have been for the homeowner to have walked into the distributor, asked for the lamp and the distributor would say. "Who is your installer? Let's give him a call and see if he can give you the ok to put it on his account."
How long did it take him to drive 30 minutes, how much gas did it cost him? All he had to do was call the initial installer and all would have been taken care of in minutes.
MSRP of CAST is expensive? Not for what you get in my opinion. There are many manufacturers we all know of that are 4 times the amount of CAST MSRP so in my opinion you are not pricing yourself out of a market. The people can either afford you or not. I know there are cheaper fixtures out there but I don't think you want to have your name mentioned in the same sentence as those.

David Gretzmier

04-05-2012, 12:17 AM

I think it all boils down to what we, as installers add dollars wise to whatever prices folks can find out there, and does the potential client think our expertise is worth that additional cost. If they already have a bid in hand, and are checking online, then they already have their doubts.

If you bid a job and spec a certain name brand, or you mention that name brand when you do your sales presentation, such as, we ONLY use brand x, then you are marrying yourself to whatever they find online about that company.

If it is after the fact, you already have the fixtures in, and folks find online pricing for the brand name they find on the lights or trans,and they feel as though you overcharged them for the whole install, then really they are either unfair or you did not convince them that they got value for their money. why else would they be checking?

But even before cast put it up, like steve said, you could already find those prices online from Cast distributors by googling it. So I don't see what the issue is by Cast selling to folks that don't have a distributor and making money off it.

I would say that for Cast installers having the pricing out there at least lets folks know that they are expensive fixtures to buy without installation. It helps justify bids in my opinion.

S&MLL

04-05-2012, 12:29 AM

I think it all boils down to what we, as installers add dollars wise to whatever prices folks can find out there, and does the potential client think our expertise is worth that additional cost. If they already have a bid in hand, and are checking online, then they already have their doubts.

If you bid a job and spec a certain name brand, or you mention that name brand when you do your sales presentation, such as, we ONLY use brand x, then you are marrying yourself to whatever they find online about that company.

If it is after the fact, you already have the fixtures in, and folks find online pricing for the brand name they find on the lights or trans,and they feel as though you overcharged them for the whole install, then really they are either unfair or you did not convince them that they got value for their money. why else would they be checking?

But even before cast put it up, like steve said, you could already find those prices online from Cast distributors by googling it. So I don't see what the issue is by Cast selling to folks that don't have a distributor and making money off it.

I would say that for Cast installers having the pricing out there at least lets folks know that they are expensive fixtures to buy without installation. It helps justify bids in my opinion.

Still doesnt answer the question of 20 percent off msrp..... why have a msrp. When the m isnt following their own suggested price
Posted via Mobile Device

newz7151

04-05-2012, 01:31 AM

Over the years, I've fielded dozens of complaints from homeowners that have been served poorly (or not at all) by distributors-to-the-trade. One homeowner drove 30 miles to a distributor to buy lamps, only to be turned away at the door because homeowners were not welcome there. Another was furious after numerous attempts to purchase lamps locally, he said, "Obviously your system doesn't work!"

Here is a supply chain:

Manufacturer, Distributor, Retailer/Installer, Customer.

Now:

Manufacturer, Customer. You've cut 2 "middle men" there.

Of course the homeowner that drove 30 miles to the distributor should be turned away. They are an end user and should purchase from a retailer/installer, not be able to purchase from a distributor.

Crap like that "Direct Buy" company is the start of all problems like this.. seriously, if you are going to cut your authorized distributors and retailers/installers, then you better be ready to significantly increase your customer support budget, because you've just gained a butt load of "customers" who are going to be buying your stuff online and calling YOU when it doesn't work. Don't try sending them to a local installer for help, they're probably already in the process of ditching your product as this thread progresses.

If a manufacturer wants more control over their distribution and pricing you do it by enforcing fines and legal penalties on the places that are not in the right. Places that may be using your trademarks without being an authorized distributor or retailer, places that are caught online selling below your MAP, serialize your product so you can track where it's being distributed from against your distribution policies and cut those distributors off at the knees in favor of the places that are actually holding up their ends of your "Authorized Dealer Agreements"

(this is just coming from a mower sales and repair place though, i have no idea how the lighting industry functions, so maybe the same practices do not apply)

steveparrott

04-05-2012, 10:15 AM

Here is a supply chain:

Manufacturer, Distributor, Retailer/Installer, Customer.

Now:

Manufacturer, Customer. You've cut 2 "middle men" there.

You might have missed the beginning of the thread, we're not cutting out anyone. All online orders go to our distributors for fulfillment. And, in every possible place we encourage consumers to hire a professional.

And to the question in the other threads - "How is it MSRP if the mfg. charges MSRP minus 20%?" Again, these are not our orders. It would be different if we sold direct to the consumer.

David Gretzmier

04-06-2012, 08:10 PM

at one time ( 2001-2004 ) I was defined as a distributor of Brite Ideas products. I paid 20k plus for that right, and the understanding was that I had exclusive rights to sell the product in my area. I even had a contract saying so with sales quotas, etc. . Brite Ideas began selling products online in 2002, and in the beginning they sent me checks when they sold product to any of the zip codes that were in my territory. I received the difference between what the customer paid and what my cost from them would have been.

It was a pretty sweet deal at first, and then the checks stopped. I continued to see product sold and installed in my area, maybe by homeowners, and I no longer had "exclusive" rights to the Brite Ideas line.

I purchased another "distributorship" from Holiday Bright Lights ( now holidynamics) and my relationship with Brite Ideas was severed for other reasons as well. It is my hope for Cast installers that distributors of the product do better in this arrangement and not worse.

It seems in this case Cast is trying to maintain the best possible relationship with its distributors while trying to sell product to folks that do not have a distributor.

I for one am happy Cast is out there with it's pricing, as they are a very expensive line and it sets an internet pro priceline referance for many of us.

Any potential customer of mine who buys cast online is pretty serious about spending money on landscape lighting.